Monday, oil and gas explorer Encore Energy Partners LP (ENP), said it entered into an agreement with an independent energy company to purchase natural gas producing properties in the Vinegarone Field in Val Verde County, Texas for $28 million in cash. In addition, the partnership said it also entered into an agreement with Encore Acquisition Co. (EAC), to purchase oil and natural gas producing properties in the Williston Basin for $25.8 million in cash.
The transaction will be immediately accretive to Encore Energy's distributable cash flow per unit, and the Partnership expects annualized distribution rate to increase from $2.00 per unit for the first quarter of 2009 to $2.05 per unit, beginning with distribution for the second quarter of 2009.
The acquisitions are effective April 1, 2009 and are expected to close by June 1, 2009 subject to customary purchase price adjustments and closing conditions.
In a separate release, Encore Energy said that it plans to make a public offering of 2.4 million common units pursuant to an effective shelf registration statement. The company said will grant a 30-day option to purchase up to an additional 360 thousand common units to the underwriters.
The net proceeds from the offering are expected to be used to fund a portion of the purchase price of the previously mentioned acquisitions.
ENP closed Monday's regular trading at $16.57, up $0.17 or 1.04%, on the NYSE.
For comments and feedback: editorial@rttnews.com